Happy, only 8 days ago this hit the wires. I don't have a position in Nite, but I noticed they've crushed it of late.
>NEW YORK, Jan 19 (Reuters) - U.S. online brokers reported lower-than-expected losses on Wednesday, beating market forecasts as revenues were boosted by a surge in trading among individual investors.
E*Trade Group Inc. <EGRP.O>, the No. 2 online broker, AmeriTrade Holding Corp. <AMTD.O>, the No. 6, and DLJdirect Inc. <DIR.N>, a smaller one belonging to investment bank Donaldson Lufkin & Jenrette <DLJ.N>, also reported record trading volumes as a result of the boom in online trading.
This surge helped Knight/Trimark Group Inc. <NITE.O>, a market maker that handles trades on behalf of brokers, which saw quarterly profits and revenues hit record levels.
"The numbers were fantastic," said Scott Appleby, an analyst for BancBoston Robertson Stephens.
But the share prices of these companies ended mostly lower in lackluster trading. E*Trade dropped 1-3/4 to 26-3/16, AmeriTrade lost 1/4 to 20-11/16, and Knight/Trimark fell 1-11/16 to 37-5/16. DLJdirect rose 7/16 to 13-3/4.
Appleby said investors appeared to focus on the rising cost of the advertising blitz that online brokers had been waging in the fiercely competitive sector.
Online brokers have postponed profits as a result, sometimes increasing the cost of each new account.
Dean Eberling of Putnam, Lovell, de Guardiola said investors also expect trading volumes to return to more normal levels. "The numbers are great -- but are they sustainable?"
The growing number of individual investors buying and selling stocks helped bring about record trading volumes registered on the Nasdaq market at the end of 1999.
The market's composite index and the Dow Jones Industrial Average have since hit records in the first few weeks of the new year amid the longest bull run in U.S. history.
E*Trade of Menlo Park, Calif., had a net loss of $5.2 million or $0.02 a share loss in the fiscal first quarter ended Dec. 31, compared with a loss of $11.6 million or $0.05 for the same period a year ago. Excluding $37.7 million in gains and $3.8 million in expenses, the loss was $38.1 million or $0.15, which nevertheless beat market expectations of a loss of $0.21, according to First Call/Thomson Financial.
Revenues more than doubled to a record $246 million.
E*Trade said heavy advertising spending plunged it into the red, but helped it attract an additional 330,000 new accounts in the quarter, bringing the total to 1.9 million. Acquisition costs totaled $289 per net new account, against $198 in the third quarter and $287 in the first quarter last year.
E*Trade President Kathy Levinson later told Reuters the cost could vary between $300 and $350 in the next few quarters.
E*Trade processed a record 133,000 trades a day during the quarter, 208 percent more than 43,000 a year ago and 65 percent higher than 80,000 in the fourth quarter.
AmeriTrade of Omaha, Neb., posted a loss of $16.1 million or $0.09 per share before charges for the fiscal first quarter ended Dec. 31, beating estimates of a loss of $0.12.
After the charges, the loss was $21.7 million or $0.12.
"We made the decision to forgo earnings and invest heavily in advertising and marketing in the first quarter," it said.
Revenues totaled $110.8 million against $52.1 million.
AmeriTrade said it added 134,000 new core accounts and handled a record average volume of 81,000 trades per day, up 142 percent from a year ago.
DLJdirect Inc. lost $2 million or $0.02 per share in the fourth quarter against a pro-forma profit of $1.8 million or $0.02 for the same period a year ago. It exceeded analysts' expectations of an operating loss of $0.06.
Net revenues more than doubled to a record $76.3 million.
DLJdirect said it processed 30,500 trades a day in the quarter, more than double the number a year ago, and added 40,000 new accounts.
Knight/Trimark's net income totaled $58.4 million or $0.50 per diluted share for the quarter, against $17.5 million or $0.17 for the same period last year. Excluding acquisition costs, the per-share profit figure was $0.54, soaring past a consensus estimate for an operating profit of $0.40.
Its revenues rose 115 percent to $256.4 million for the quarter against $119.3 million for the same period a year ago.
The number of trades that it handled climbed 118 percent to 30.1 million against 13.8 million a year ago. The average number of trades processed per day was 470,496, up 118 percent from 215,564 last year.
22:14 01-19-00 |
